Supplementary memorandum from the Department
for Business, Enterprise and Regulatory Reform
INTERMITTENCY
First, it might be helpful to clarify the terms
that are used in relation to the characteristics of renewable
generation such as wind. All generating technologies are to some
extent variable ie output may move up or down and intermittent
ie output may stop altogether. We generally use "intermittent"
to express both these characteristics. The key issue in relation
to wind and some other renewable technologies is that this intermittency
is relatively unpredictable (although sufficiently predictable
in the short term to allow "on the day" balancing of
the system) and relatively uncontrollable (whilst output can be
curtailed, it cannot be increased in response to changes in the
supply-demand balance).
1. What implications does the problem of
intermittency have for conventional generation?
Increase in generation capacity margin
Wind generation has a low capacity credit—ie
the extent to which it can be relied on to meet demand in system
planning timeframes is low, generally estimated to be between
10%-20% of the installed capacity. This means that the deployment
of wind is largely to displace fuel rather than generation capacity.
Responsive (thermal) generation capacity (largely fossil fuel,
but could include renewable biomass) must be maintained (ie not
retired) to support system reliability. This does not have to
be on a full one-for-one basis, but the low capacity credit of
wind generation means that even with a large amount of wind capacity,
our need for conventional capacity is unlikely to reduce much
below the levels we now have and the capacity which is soon to
close under the Large Combustion Plants Directive will still need
to be replaced.
A consequence of this is that with significant
penetrations of intermittent generation some thermal plant will
have to act solely as "back up" capacity, running principally
at peak demand when there are low wind speeds. This plant will,
therefore, have very low load factors and be able to recover its
investment and fixed operating costs only at limited (and unpredictable)
times throughout a year. In the near-term, it is likely that older
plant will be relegated to operating in this way as the level
of wind penetration grows.
Balancing: increase in need for flexibility and reserves
An increased penetration of variable and difficult
to predict renewable power will place an additional duty on the
remaining generating plant with respect to balancing supply and
demand. Increased variability will increase the need for flexibility
required from conventional plant, while increased uncertainty
in wind output will increase the need for various forms of reserve
services, generally provided by a combination of synchronised
plant operating part-loaded, demand and standing reserve.
The cost of this additional flexibility and
reserve will be driven by conventional plant flexibility and plant
efficiency when operating part loaded. However, non-generation
solutions, such as demand response and interconnection technologies
may be used to provide balancing services. Analysis of alternative
options in terms of their costs and benefits in different systems
requires more work.
2. What differences, in terms of intermittency,
are there between different sources of renewable electricity?
There are a number of technologies that are
classed as renewable: these include wind, hydro, tidal, wave,
biomass, solar PV and landfill gas. Each has different characteristics
in terms of its intermittency and predictability.
Wind turbines are intermittent being dependent
upon the wind blowing at a minimum speed to enable operation.
Similarly, waves are generated by the wind and so the availability
of waves sufficient to enable generation will vary over time.
Solar PV is dependent on sunlight so will vary over the year and
with daily conditions. Hydro is dependent upon levels of precipitation
so will vary, though in a more predictable manner than wind.
Tidal technologies (both stream and range)—are
also intermittent but are totally predictable.
The ability of these technologies to generate
at any given time will vary, as will the level of output that
can be achieved as a percentage of total rated capacity as these
both depend upon the available resource at that time, which is
variable.
Biomass and landfill gas are controllable and
able to respond in a similar way to other forms of thermal generation.
3. It has been suggested that to achieve
the target of 20% of final energy it will be necessary to achieve
between 35-40% of electricity generation from renewable sources.
In evidence we discussed intermittency being a containable problem
up to around 20-30% of renewable electricity generation. What
would be the impact of a higher percentage of renewables penetration?
There is good evidence of the impacts of renewable
penetration at 20-25% levels. The UK Energy Research Centre produced
a helpful synthesis of this evidence. They found that there were
no technical barriers to accommodating this penetration of renewable
generation and that the costs of maintaining system reliability
and system balancing were relatively modest (0.1-0.15 p/kWh spread
across all demand).
However, this analysis was based on the assumption
of a highly flexible generation system and is valid for relatively
small levels of penetration. In relation to higher levels of penetration,
such as 40%-50%, we need to do further analysis. The indications
are that the challenge is an economic rather than technical one,
ie ensuring that sufficient capacity of all technologies has the
right incentives to remain on and join the network to support
the deployment of intermittent renewable technologies and ensuring
the economic and efficient operation of the balancing mechanism.
Looking further ahead there are measures that
may mitigate the effects of intermittency eg:
— flexibility: there are a number of
aspects to this, including dynamic demand providing remotely controlled
short-term response (eg in fridges or air conditioning) and longer-term
response through shifting demand in response to price and/or weather
conditions.
— Increasing electricity demand: moving
non-electricity demand into the electricity sector (eg using electricity
to supply demand that has been traditionally supplied by gas).
— In a system characterised by high
penetration of intermittent (eg wind) and inflexible (eg nuclear)
generation there is an increased requirement for flexible generation
capacity to maintain the balance between supply and demand. To
ensure its availability as reserve, many of these flexible generators
will have minimum output limits. A combination of these factors
(intermittent and inflexible generation plus high levels of reserve
generation) will result in significant periods of power surplus;
when low demand coincides with high wind output causing power
prices to drop to near zero. At high penetrations of intermittent
generation this may occur during a significant proportion of the
year and could represent a sizeable amount of total output. Increasing
electricity demand (beyond just peak shifting) during these periods
not only creates a market for the surplus (low-carbon) power and
prevents spilling / constraining-off of renewable plant, but also
facilitates cost-effective switching of energy services away from
other (more polluting) energy vectors (eg gas).
— Geographical diversity. As deployment
of renewables increases we will see greater geographical diversity
that could mitigate some of the effects of intermittency; for
example there is likely to be a high level of on-shore wind in
Scotland combined with off-shore wind installations further south.
— A greater degree of inter-connection.
The larger an electricity system, the greater the scope for fluctuations
in the total supply-demand balance to smooth themselves out. A
greater degree of interconnection with the Continental mainland
and with Ireland may therefore help to address the challenge.
New interconnectors to the Netherlands and to France are already
in the development process.
— Energy storage: BERR has supported
the development of flow battery technology through the Technology
Programme and its predecessors, ie Regenesys and more recently
with Plurion. Success has been limited so far but the technology
does seem promising, largely because it is scaleable to utility
size (tens of megawatt hours) and its energy storage can be separated
from its power output, unlike a conventional battery.
Understanding the impact and efficiency of these
measures under various future development scenarios will require
further work. However it will be difficult to make an appropriate
selection of the above technology solutions a priori, given the
uncertainties in a number of key driving parameters (cost of alternative
measures, dynamic and cost characteristics of the future generation
mix, level and responsiveness of demand etc). It may thus be appropriate
to ensure that the market framework is able to facilitate the
emergence of the most cost efficient portfolio of solutions.
SEVERN TIDAL
POWER
4. The Committee would appreciate further
information on the forthcoming feasibility study into the Severn
Barrage project. What issues will this study look into?
Tidal range technologies—barrages and
lagoons—have the potential to make a significant contribution
to our energy needs. They work by making use of the height difference
between high and low tides to generate electricity by creating
a differential in the water levels either side of the structure
and then passing this water through turbines. The Severn Estuary
has the second highest tidal range in the world at roughly 14
metres on a spring-tide.
The feasibility study (which was announced in
September 2007) aims to enable the Government to decide whether,
and if so, on what terms it could support a tidal range power
project or scheme in the Severn Estuary.
The terms of reference were published in January
2008 and are attached at Annex 1. The study will cover all tidal
range technologies, including barrages and lagoons. It will assess
in broad terms, engaging stakeholders and the wider public, the
costs, benefits and impact of a project or projects, including
environmental, social, regional, economic and energy market impacts.
It will run for roughly two years and will be
a two stage process with a decision point at the end of each.
A high level work plan for the feasibility study is attached at
Annex 2. The first stage work, likely to run until late 2008,
will focus on high level issues and reach a first view on whether
there are any fundamental issues that mean the project can not
proceed. Subject to the decision at the end of the first phase,
the second phase will look at the issues in more detail and culminate
in a full public consultation in early 2010.
The study will include a Strategic Environmental
Assessment (SEA) to ensure a detailed understanding of the Estuary's
resource; there will be a consultation on the scope of the SEA
in the autumn following the first phase decision on whether to
proceed.
A Parliamentary Forum has been set up, chaired
by the Secretary of State for Business, Enterprise and Regulatory
Reform, John Hutton, to provide all interested MPs, members of
the House of Lords, Welsh Assembly Members and MEPs the opportunity
to engage with the study. This forum first met on 20 February
and meetings will take place on a quarterly basis. Details of
the next forum will be placed in the libraries of the House of
Commons and the House of Lords once a date has been arranged.
Further information about the study (including
regular updates) will be available from www.berr.gov.uk/energy/severntidalpower
5. What is the estimated impact of the Severn
Barrage project on the UK's renewables target?
Estimates from previous work suggest the Cardiff-Weston
scheme would have a generation capacity of some 8640 MW and an
annual electricity output of 17 TWh/y or some 5% of UK annual
electricity demand and would take five to seven years to construct
once planning consent had been granted. The Sustainable Development
Commission report Turning the Tide, published on 1 October
2007, estimates that the Russell Lagoon concept could capture
around 6.5TWh of energy a year from lagoons totalling 2,835 MW.
However, it is difficult to estimate how much energy lagoons can
produce as there are differences of opinion on whether they are
able to achieve a higher load factor as a result of ebb-flood
generation, rather than ebb-only generation and as there are no
existing examples of tidal lagoons. We will be gathering further
evidence on both barrages and lagoons as part of the feasibility
study.
A Severn Tidal Power scheme would be a way of
helping meet the renewable energy target and the Severn Tidal
Power feasibility study is being considered in the context of
both the development of the UK Renewable Energy Strategy and the
UK's wider climate change and energy objectives.
Article 5(2) of the proposed European Directive
on the promotion of the use of energy from renewable sources is
helpful for the UK as it gives partial credit to very large renewable
projects with long lead times and significant risks. The Government
supports this measure as we see one role of the 2020 renewables
target as being to encourage large innovative projects as part
of a long-term move to a low carbon economy. Whether large projects
are in operation by 2020, or a little later, is secondary to our
long-term goal. We expect the Commission to take into account
how near to 2020 the actual generation takes place, or is expected
to do so, when assessing the amount of credit that partially built
projects receive.
SUPPORT SCHEMES
6. The Committee would be grateful if BERR
could suggest two or three Member States' support schemes that
it would be useful to study
The 27 EU Member States all operate different
national support schemes for the promotion of renewable energy
using a wide range of market based instruments. The differences
reflect Member States' individual approaches to both renewables
and their electricity markets in general.
For interesting case studies of Member States'
support schemes, we suggest it would be useful for the Committee
to study the different systems in place in Spain, Italy and France.
These are all large Member States but provide differing schemes
and levels of support for renewable energy and have had varying
degrees of success in facilitating growth in the renewable sector.
They also represent examples of a feed-in tariff regime (Spain
and France), a green certificate scheme (Italy) and a tendering
approach (France). The German approach to feed-in tariffs has
also been much studied recently.
Issues which the Committee may want to consider
in looking at the alternative support schemes might include: how
network costs are treated by the various schemes and how the schemes
work within a competitive electricity market.
There is more information available on EU Member
States' support schemes in the Commission's working document,
The support of electricity from renewable energy sources
published alongside the 23 January draft renewables directive.
This can be found at:
http://ec.europa.eu/energy/climate_actions/doc/2008_res_working_document_en.pdf
Annex 1
SEVERN TIDAL
POWER FEASIBILITY
STUDY—TERMS
OF REFERENCE
Building on the work of the Sustainable Development
Commission and earlier studies, the feasibility study will:
— assess in broad terms the costs,
benefits and impact of a project to generate power from the tidal
range of the Severn Estuary, including environmental, social,
regional, economic, and energy market impacts;
— identify a single preferred tidal
range project (which may be a single technology/location or a
combination of these) from the number of options that have been
proposed;
— consider what measures the Government
could put in place to bring forward a project that fulfils regulatory
requirements, and the steps that are necessary to achieve this;
and
— decide, in the context of the Government's
energy and climate change goals and the alternative options for
achieving these, and after public consultation, whether the Government
could support a tidal power project in the Severn Estuary and
on what terms.
The work will be carried out by a cross-Whitehall
team led from the Department for Business, Enterprise and Regulatory
Reform, including representatives of the Welsh Assembly Government
and the South West Regional Development Agency, taking external
advice as necessary and engaging stakeholders and the wider public.
The study is expected to last roughly two years.
The study will look at the range of options
for power generation from the Severn Estuary tidal range, including
barrages, lagoons and other technologies. It will include a Strategic
Environmental Assessment of plans for generating electricity from
the Severn Estuary tidal range to ensure a detailed understanding
of its environmental resource, recognising the nature conservation
significance of the Estuary.
The feasibility study team will report to the
Secretary of State for Business, Enterprise and Regulatory Reform
supported by ministers from DCLG, Defra, DfT, Treasury, Wales
Office, the Welsh Assembly Government and the Minister for the
South West.
If the outcome of the feasibility study is a
decision to proceed, extensive and detailed further work would
be needed to plan and implement a tidal power project, and secure
the regulatory consents that would be required.
ANNEX 2-SEVERN TIDAL POWER F EASIBILITY STUDY – INDICATIVE HIGH LEVEL WORKPLAN
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